Page 23 - RENJ_Combo_1120

such that we were hearing it in the market,” Smith
said. “And then
having this solid
team come to
us and say, ‘We
think there’s
something here
and here’s this
solution,’ I think
that’s really why
someone — us in this case — really dedicated the time.”
The group began to revisit the concept about two years ago, as the industry at large was discussing a broader update to the landmark site remediation law, also known as SRRA. While Gov. Phil Murphy signed the so-called SRRA 2.0
law in August 2019, the team of professionals continued their discussions with the DEP when it came to the insurance question.
That approval came this past summer
“I think they had heard the message from the regulated community that this was an issue that people were concerned about and they really rolled up their sleeves and said,
‘OK, let’s see if we can come up
with something that Ironshore can write and that we say meets our rules,’ ” said Toft, who chairs CSG’s environmental law group. “And that’s what we did over the course of a number of months and a number of exchanges of languages.”
While DEP approval is a major milestone, the team said there is still work to be done in order to unlock the full benefits of the insurance option. Until then, property owners may still be more comfortable with escrow accounts and other means of financial assurance.
“Everything comes down to the cost,” Crooker said. “And what I see it as is an evolving product. As Toby and the folks get more and more comfortable with the loss or the claim risk, the hope is you get more and more of a pooling effect and less and less of a collateralized risk type of thing. So I’m hoping that as it matures, it becomes an ever more attractive tool.”
Smith said there are advantages, even for early adopters. The policies will typically require collateral, he said, but that will translate into lower up-front costs when compared to what will go into a trust or escrow in order to secure those
environmental obligations.
“For the majority there is a collateral requirement, but that’s going to depend on the financial strength
of the guarantor,” he said. “But whatever it is, it’s going to be less than 100 percent (of face value) ... So it’s freeing up capital that would otherwise be paralyzed on sidelines.”
Alviggi noted that “the plan was and is to roll this out for the greater good” — even though the product is currently exclusive to Ironshore — “because capital is capital and I think we all agree that dead capital
doesn’t do anybody any good.”
And he was quick to point out that having Smith and Ironshore on the team “helped us immensely, because at the end of the day he has the ability and the authority to make
the decisions when it comes to amending the policy form to fit the DEP requirements or requests.”
Also critical were Toft’s standing with regulators and Crooker’s leadership as the client, which he said provided a focal point for each of the three service providers.
“It was a heavy lift, no doubt, but
we’re all in this community, we all are active in New Jersey real estate, especially brownfield real estate,
Christopher Alviggi
order to get us to this point, because without collaboration, you have nothing.” RE
REALESTATENJTM 21
Toby Smith
and thankfully Dennis as
the lawyer
has a great relationship with the DEP,” Alviggi said, adding:
“It was a true partnership and collaboration in
Safety, Security, Liquidity In UNCERTAIN TIMES
Kearny Insured Liquidity Sweep
e
Complete Access • Complete Coverage • Complete Automation
e
Dollar Protection for Short Term Cash.
Available for Business, Individuals, Government.
S
S
i
i
n
n
g
g
l
l
S
S
o
o
u
u
r
r
c
c
e
e
A
A
c
c
c
c
o
o
u
u
n
n
t
t
P
P
r
r
o
o
v
v
i
i
d
d
e
e
s
s
M
M
u
u
l
l
t
t
i
i-
M
M
i
i
l
l
l
l
i
i
o
on
800-273-3406 – kearnybank.com